Indiana lawmakers open a door for charter schools to share referendum funds

In a last-minute amendment Monday, lawmakers reopened a door to allow charter schools to access property tax money raised through school referendums.

The proposal, tucked into a bill dealing with a number of tax issues, would allow traditional public schools to share tax increases approved by voters with charter schools in their district boundaries.

Charter schools currently do not receive local property taxes, nor do they have the option to put a referendum on the ballot. Instead, they receive an additional state grant.

A similar idea was raised last year but failed early on. This year, lawmakers waited until the week before the session is set to end to put the language into an amendment, which circumvented any public comment on the measure.

While the new proposal doesn’t impose a mandate on districts, the last-minute move shows lawmakers’ continued support for charter schools to have access to property tax dollars. The amendment passed the Senate in a 26-to-25 vote, with Lt. Gov. Suzanne Crouch acting as a tiebreaker. It was an unusual divide, with some Republicans voting against the measure and a Democrat voting in favor.

Supporters argued that cooperating with charters could help schools successfully pass referendums and see better voter turnout, if parents of students in charter schools had a stake in the outcome.

“I find this amendment very creative,” said Sen. Jim Buck, R-Kokomo. “The host school has total autonomy over the agreement whether to do it or not, but if that host school thinks they’d have greater success passing that referendum… I guarantee you it’s the best interest of all the children within the purview of that host school.”

But Democrats raised concerns that the proposal would set lawmakers up to later tweak the law to be a requirement to share referendum funds rather than an option. They worried the provision would take funding away from traditional public school districts, which are increasingly relying on referendums that can help pay for teacher salaries, building renovations, and day-to-day operations.

The proposed measure specifically excludes virtual charter schools. The amendment’s author, Sen. Linda Rogers, R-Granger, said given the recent alleged $86 million virtual school fraud, those schools deserve more scrutiny.

Indianapolis Public Schools is currently grappling with how to share the tax money it won in a 2018 referendum with its 14 innovation charter schools. The referendum is expected to raise an additional $27.5 million per year over the next eight years.

Earlier this session, lawmakers also briefly considered limiting schools to only running referendums in November elections, in an attempt to ensure better voter turnout for the local questions. That proposal was stripped out last week.

The bill still has one more vote in the Senate and the changes would need to be approved by both chambers.